No Discretion For Bank’s Post-Trial Appeal Over Dishonored Cashier’s Check

MidAmerica Bank sued Charter One Bank for failing to honor a $50,000 cashier’s check purchased at Charter. The check was payable to Essential Technologies of Illinois. David Hernandez was president of Essential. Mary Christelle, David’s mother, purchased the cashier’s check with money from her account at Charter.

Essential deposited the check into its account at MidAmerica. Four days later, Mary instructed Charter to stop payment on the check. Charter issued a stop-payment order, and refused to honor the check when MidAmerica presented it for payment. When the check was returned to MidAmerica with a “stop payment” stamp, MidAmerica sent it back to Essential and deducted $50,000 from MidAmerica’s account.

The opinion does not state what happened between MidAmerica and Essential, except that the bank did not discover a fraudulent scheme involving Essential. But MidAmerica sued Charter for $50,000 plus attorney fees and interest for dishonoring the check.

The banking issue was whether Charter had the right to stop payment on a cashier’s check. After a bench trial, the trial court said “No,” but did not award fees or interest. The appellate court disagreed and ruled that Charter could stop payment.

MidAmerica appealed to the Illinois Supreme Court. The first issue for the supreme court was the proper standard of review. Even though the case went through a bench trial, the trial court’s decision got no discretion. The dispute was reviewed de novo by the supreme court because “the issue on appeal is limited to application of the law to the undisputed facts …”